Himalaya Granites Ltd. (HIMGRANITE) - Director Report

Company director report

for the Financial Year 2016-17

Dear Shareholders

Your Directors have the pleasure in presenting the 29th Annual Report on thebusiness and operations of the Company and the Audited Financial Statements of the Companyfor the financial year ended March 31 2017.

Adjustment of depreciation on reassessment of useful lives of tangible assets

-

-

Balance carried to Balance Sheet

(33777008)

(23509528)

2. STATE OF AFFAIRS OF THE COMPANY AND FUTURE OUTLOOK

During the year under review your Company continued to let out part of its factorysheds and office space. The closure of the Company's unit has posed a challenge for theCompany to resume operation. Your Directors are exploring alternate avenues to make theCompany operative.

3. DIVIDEND

Considering the loss incurred in the current financial year and accumulated lossesyour Directors have not recommended any dividend for the financial year under review.

4. SUBSIDIARIES AND ITS PERFORMANCE

Your Company had no subsidiaries Joint Venture or Associate Company during the yearunder review.

5. TRANSFER TO GENERAL RESERVE

In view of the accumulated losses no transfer is proposed to the General Reserve.

6. BOARD OF DIRECTORS

Your Company has received declarations from all the Independent Directors viz. Mr.Mahesh Kumar Malpani [DIN:02603222] Mr. Beni Gopal Saraf [DIN: 00267858] and Mr. PradipManharlal Domadia [DIN: 05292129] confirming that they meet the criteria of independenceas prescribed under sub-secfion (6) of Section 149 of the Companies Act 2013 andRegulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Ms. Mathangi Ramanujam [DIN: 07095686] Non-Executive Directorof the Company will retire by rotation at the ensuing Annual General Meeting (AGM) andbeing eligible offers herself for re-appointment. The Board recommends her reappointmentat the ensuing AGM.

During the financial year 2016-17 there was no change in the composition of Board ofDirectors of the Company. None of the Directors of your Company is disqualified under theprovisions of Section 164(2)(a) & (b) of the Companies Act 2013.

7. CHANGES IN SHARE CAPITAL

During the year under review there was no change in the Share Capital of the Company.

8. KEY MANAGERIAL PERSONNEL

During the year under review Mr. Hariom Pandey Member of the Institute of CompanySecretaries of India was appointed as Company Secretary of the Company by the Board ofDirectors at their meeting held on August 11 2016 on Recommendation of Nomination &Remuneration Committee of the Company. There was no further appointment or resignation ofKey Managerial Personnel (KMP) during the year under review.

As on March 31 2017 the Company has the following KMPs:

1. Mr. Ramesh Kumar Haritwal (Managing Director & CEO)

2. Mr. Hariom Pandey (Company Secretary)

9. MEETINGS OF THE BOARD

During the financial year 2016-17 four (4) meetings of the Board of Directors of theCompany were held on May 28 2016 August 11 2016 November 11 2016 and February 142017. The Composition of the Board of Directors and their attendances at the BoardMeetings during 2016-17 were as below:

Name of the Directors and Director Identification Number [DIN]

Category of Directorship

No. of Board Meetings

Held

Attended

Mr. Saurabh Mittal [DIN:00273917]

Non-Executive Chairman Promoter Director

4

2

Mr. Ramesh Kumar Haritwal [DIN:01486666]

Managing Director & CEO

4

4

Mr. Beni Gopal Saraf [DIN:00267858]

Non-Executive- Independent Director

4

4

Mr. Mahesh Kumar Malpani [DIN:02603222]

Non-Executive- Independent Director

4

4

Mr. Pradip Manharlal Domadia [DIN:05292129]

Non- Executive- Independent Director

4

4

Ms. Mathangi Ramanujam [DIN: 07095686]

Non-Executive Director

4

4

10. PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act 2013 and Regulation 25(3)&(4) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theIndependent Directors in their meeting held on March 31 2017 have evaluated thePerformance of Non-Independent Directors Chairperson of the Company after considering theviews of the Executive and Non-Executive Directors Board as a whole and assessed thequality quantity and timely flow of information between the Company's Management and theBoard. The Nomination & Remuneration Committee has also carried out evaluation ofperformance of every Director of the Company. On the basis of evaluation made by

the Independent Directors and the Nomination & Remuneration Committee and by way ofindividual and collective feedback from the Non-Independent Directors the Board hascarried out the annual performance evaluation of the Directors individually as well asevaluation of the working of the Board as a whole and Committees of the Board.

The criteria for evaluation are outlined below:

a. For Independent Directors:

- Knowledge and Skills

- Professional conduct

- Duties role and functions

- Compliance with Code of Business Ethics and Code of Conduct of the Company

- Rendering independent and unbiased opinion and judgements

- Attendance and active participation in meetings of Board and Committees of the Boardand Members of the Company

- Assistance in implementing corporate governance practices

- Updati'on of skills and knowledge

- Information regarding external environment

- Raising of concerns if any to the Board

- Study of agenda in depth prior to Meeting

- Contribution towards the formulation and implementation of strategy for achieving thegoals of the Company

b. For Executive & Non-Executive Directors:

- Performance as Team Leader/Member

- Evaluating Business Opportunity and analysis of Risk Reward Scenarios

- Professional Conduct and Integrity

- Sharing of Information with the Board

- Attendance and active participation in the Board and Committee of the Board andMeetings of Members of the Company

- Whether difference of opinion was voiced in the meeting

- Whether Executive Directors were able to answer the queries raised by IndependentDirectors

- Compliance with Code of Business Ethics and Code of Conduct of the Company

- Assistance in implementing corporate governance practices

- Independent view on key appointments and strategy formulation

- Review of integrity of financial information and risk management

- Updati'on of skills and knowledge

- Information regarding external environment

- Raising of concerns if any to the Board

- Assistance in formulation of statutory and non-statutory policies for the Company

- Alignment of Company's resources and budgets to the implementation of theorganization's strategic plan

- Creativity and innovations in creating new products

- Understanding of the business and products of the Company

c. For Committees of the Board:

- Adequate and appropriate written terms of reference

- Volume of business handled by the committee set at the right level?

- Whether the committees work in an 'inclusive' manner

- Effectiveness of the Board's Committees with respect to their role composition andtheir interaction with the Board

- Are the committees used to the best advantage in terms of management developmenteffective decision etc.

- Attendance and active participation of each member in the meetings

- Review of the action taken reports and follows up thereon

d. For Board of Directors as a whole:

- Seffi'ng of clear performance objectives and how well it has performed against them

- Contribution to the testing and development and strategy

- Contribution to ensuring robust and effective risk management

- Composition of the Board and its committees appropriate with the right mix ofknowledge and skills sufficient to maximize performance in the light of future strategy

- Effectiveness of inside and outside Board relationship

- Responding to the problems or crises that have emerged

- Relationship between Board and its Committees and between committees themselves

- Communication with employees and others

- Updation with latest developments in regulatory environments and the market in whichthe Company operates

- Role and functioning of the Board on the matters pertaining to financial reportingand internal controls

- Contribution of the Board for ensuring that the Company is adhere to the statutoryand regulatory

compliances as applicable to the Company

The Directors expressed their satisfaction with the evaluation process.

11. AUDIT COMMITTEE

As on March 31 2017 the Audit Committee of the Company comprises of three memberswith two Independent Directors namely Mr. Mahesh Kumar Malpani (Chairman) and Mr. BeniGopal Saraf and one Executive Director namely Mr. Ramesh Kumar Haritwal Managing Director& CEO as members. The Committee inter alia reviews the Internal Control System andreports of Internal Auditors and Compliance of various Regulations. The Committee alsoreviews the Financial Statements before they are placed before the Board. The brief termsof reference of the Committee and the details of the Committee meetings are providedherein below:

Terms of reference for the Audit Committee:

Powers of Audit Committee

The Audit Committee shall have powers which should include the following:

1. To investigate any activity within its terms of reference.

2. To seek information from any employee.

3. To obtain outside legal or other professional advice.

4. To secure attendance of outsiders with relevant expertise if it considersnecessary.

Role of Audit Committee

The role of the Audit Committee shall include the following:

1. Oversight of the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible;

2. Recommendation for appointment remuneration and terms of appointment of auditors ofthe Company;

3. Approval of payment to statutory auditors for any other services rendered by thestatutory auditors except those which are specifically prohibited;

4. Reviewing with the management the annual financial statements and auditor's reportthereon before submission to the board for approval with particular reference to:

i. Matters required to be included in the Director's Responsibility Statement to beincluded in the Board's report in terms of clause (c) of sub-section 3 of Section 134 ofthe Companies Act 2013;

ii. Changes if any in accounting policies and practices and reasons for the same;

iii. Major accounting entries involving estimates based on the exercise of judgment bymanagement;

iv. Significant adjustments made in the financial statements arising out of auditfindings;

v. Compliance with listing and other legal requirements relating to financialstatements;

vi. Disclosure of any related party transactions;

vii. Modified opinion(s) in the draft audit report;

5. Reviewing with the management the quarterly financial statements before submissionto the board for approval;

6. Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document / prospectus /notice and the report submitted by the monitoring agency monitoring the utilisation ofproceeds of a public or rights issue and making appropriate recommendations to the Boardto take up steps in this matter;

7. Review and monitor the auditor's independence and performance and effectiveness ofaudit process;

8. Approval or any subsequent modification of transactions of the company with relatedparties;

9. Scrutiny of inter-corporate loans and investments;

10. Valuation of undertakings or assets of the company wherever it is necessary;

12. Reviewing with the management performance of statutory and internal auditorsadequacy of the internal control systems;

13. Reviewing the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit;

14. Discussion with internal auditors of any significant findings and follow up thereon;

15. Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board;

16. Discussion with statutory auditors before the audit commences about the nature andscope of audit as well as post-audit discussion to ascertain any area of concern;

17. To look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non-payment of declared dividends) andcreditors;

18. To review the functioning of the Whistle Blower mechanism;

19. Approval of appointment of Chief Financial Officer after assessing thequalifications experience and background etc. of the candidate;

20. Carrying out any other function as may be referred to by the Board or mandated byregulatory provisions from time to time.

Review of information by Audit Committee

1. The Audit Committee shall mandatorily review the following information:

a. Management discussion and analysis of financial condition and results of operations;

b. Statement of significant related party transactions (as defined by the AuditCommittee) submitted by management;

c. Management letters / letters of internal control weaknesses issued by the statutoryauditors;

d. Internal audit reports relating to internal control weaknesses;

e. The appointment removal and terms of remuneration of the Chief internal auditorshall be subject to review by the Audit Committee; and

ii) annual statement of funds utilized for purposes other than those stated in theoffer document/ prospectus/noti'ce in terms of Regulation 32(7) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

Meetings and atiendance:

During the financial year 2016-17 four (4) meetings of the Audit Committee were heldon May 28 2016 August 11 2016 November 11 2016 and February 14 2017 and theattendances of the Committee Members were as under:

Name of the Committee Members

Category

No. of Meetings

Held

Attended

Mr. Mahesh Kumar Malpani

Non-Executive -Independent Director

4

4

Mr. Beni Gopal Saraf

Non-Executive -Independent Director

4

4

Mr. Ramesh Kumar Haritwal

Executive- Non- Promoter Director

4

4

12. NOMINATION AND REMUNERATION COMMITTEE

As on March 31 2017 the Nomination and Remuneration Committee of the Companycomprises of three Independent Directors namely Mr. Pradip Manharlal Domadia (Chairman)and Mr. Mahesh Kumar Malpani and Mr. Beni Gopal Saraf as members of the Committee. Thebrief terms of reference of the Committee and the details of the Committee meetings areprovided herein below:

Terms of reference for the Nomination and Remuneration Committee:

1. To formulate criteria for:

a. determining qualifications positive attributes and independence of a director;

b. evaluation of independent directors and the Board.

2. To devise and recommend policies on:

a. remuneration including any compensation related payments of the directors keymanagerial personnel and other employees and recommend the same to the board of theCompany;

b. board diversity laying out an optimum mix of executive independent andnon-independent directors keeping in mind the needs of the Company.

3. To identify persons who are qualified to:

a. become directors in accordance with the criteria laid down and recommend to theBoard the appointment and removal of directors;

b. be appointed in senior management in accordance with the policies of the Company andrecommend their appointment to the HR Department and to the Board.

4. To carry out evaluation of the performance of every director of the Company.

5. To express opinion to the Board that a director possesses the requisitequalificati'on(s) for the practice of the profession in case the services to be renderedby a director are of professional nature.

6. To extend or continue the term of appointment of the independent director on thebasis of the report of performance evaluation of independent directors.

7. To carry out such other business as may be required by applicable law or delegatedby the Board or considered appropriate in view of the general terms of reference and thepurpose of the Nomination and Remuneration Committee.

Meetings and attendance:

During the financial year 2016-17 two (2) meetings of the Nomination &Remuneration Committee were held on August 11 2016 and March 31 2017 and the attendancesof the Committee Members were as under:

Name of the Committee Members

Category

No. of Meetings

Held

Attended

Mr. Pradip Manharlal Domadia

Non-Executive -Independent Director

2

2

Mr. Mahesh Kumar Malpani

Non-Executive -Independent Director

2

2

Mr. Beni Gopal Saraf

Non-Executive -Independent Director

2

2

Summary on Nomination & Remuneration Policy of the Company

The Board of Directors has adopted the Remuneration Policy on the recommendation of theNomination and Remuneration Committee in compliance with Section 178 of the Companies Act2013 and Regulation 19 read with Part D of Schedule II of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. This Policy applies to all the"Executives" of the Company and is valid for all employment agreements enteredinto after the approval of the Policy and for changes made to existing employmentagreements thereafter. In keeping with the provisions of Section 178 the remunerationstructure of the Company comprises of fixed remuneration (including fixed supplements)performance-based remuneration (variable salary) such as pension schemes whereapplicable other benefits in kind and severance payment where applicable other benefitsin kind and severance payment where applicable. Further the Policy states that theNon-Executive Directors and Independent Directors of the Company may receive remunerationonly by way of fee and reimbursement of expenses for participation in meetings of theBoard or Committee thereof and profit related commission as may be permissible by theapplicable law. Additionally the Policy also lays down the overall selection criteria forthe Executives of the Company which is based on broad heads such as competenciescapabilities compatibility strong interpersonal skills commitment among others. ThePolicy also entitles Executives to a severance fee.

13. STAKEHOLDERS' RELATIONSHIP COMMITTEE

As on March 31 2017 the Stakeholders' Relationship Committee of the Company consistsof two Independent

Directors namely Mr. Beni Gopal Saraf (Chairman) and Mr. Mahesh Kumar Malpani as memberof the Committee. The brief terms of reference of the Committee and the details of theCommittee meetings are provided herein below:

Terms of reference for the Stakeholder's Relationship Committee:

i. To ensure proper and timely attendance and redressal of grievances of securityholders of the Company in relation to:

a. Transfer of shares

b. Non-receipt of annual reports

c. Non-receipt of declared dividend

d. All such complaints directly concerning the shareholders / investors as stakeholdersof the Company; and

e. Any such matters that may be considered necessary in relation to shareholders andinvestors of the Company.

ii. Formulation of procedures in line with the statutory guidelines to ensure speedydisposal of various requests received from shareholders from time to time;

iii. To review and / or approve applications for transfer transmission transpositionand mutation of share certificates including issue of duplicate certificates and newcertificates on split / sub-division / consolidation / renewal and to deal with allrelated matters.

iv. To review and approve requests of dematerialization and rematerialisation ofsecurities of the Company and such other related matters;

v. Appointment and fixing of remuneration of RTA and overseeing their performance;

vi. Review the status of the litigation(s) filed by/against the security holders of theCompany;

vii. Review the status of claims received for unclaimed shares;

viii. Recommending measures for overall improvement in the quality of investorservices;

ix. Monitoring implementation and compliance with the Company's Code of Conduct forProhibition of Insider Trading in pursuance of SEBI (Prohibition of Insider Trading)Regulations 2015;

x. Review the impact of enactments/ amendments issued by the MCA/ SEBI and otherregulatory authorities on matters concerning the investors in general;

xi. Such other matters as per the directions of the Board of Directors of the Companyand/ or as required under Regulation 20 read with Part D of Schedule II of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 from time to time.

Meeting and attendance :

During the financial year 2016-17 two (2) meeting of Stakeholders' RelationshipCommittee were held on August 11 2016 and March 31 2017 and the attendances of CommitteeMembers were as under:

Name of the Committee members

Category

No. of meetings

Held

Attended

Mr. Beni Gopal Saraf

Non-executive -Independent Director

2

2

Mr. Mahesh Kumar Malpani

Non-executive -Independent Director

2

2

The table below gives the number of Shareholders Complaints received resolved andpending during the financial year 2016-17.

Number of Complaints:

Received

Resolved

Pending

Nil

Nil

Nil

14. INDEPENDENT DIRECTORS AND THEIR MEETING

There are three (3) Independent Directors in the Company as per following details:

Mr. Pradip Manharlal Domadia [DIN:05292129]

Mr. Mahesh Kumar Malpani [DIN:02603222]

Mr. Beni Gopal Saraf [DIN:00267858]

During the year under review one (1) meeting of Independent Directors was held onMarch 31 2017 where all the Independent Directors of the Company were present.

15. BUY BACK COMMITTEE

The Board of Directors of the Company at their meeting held on October 10 2015constituted a Buy-back Committee for delegation of various powers required for givingeffect to the buy-back of Equity Shares of the Company. The Buy-back Committee consists ofthree Directors from the Board as Members of the Committee- Mr. Ramesh Kumar HaritwalManaging Director & CEO Mr. Mahesh Kumar Malpani Independent Director and Mr. BeniGopal Saraf Independent Director.

However with the completion of buy-back of the Equity shares the existence of thesaid Committee was no longer required and accordingly during the year under review theBuy-back Committee was dissolved by the Board of Directors at their meeting held on August11 2016. There was no meeting of the Committee held during the year under review prior toits dissolution.

16. VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a 'WhistleBlower Policy' to establish Vigil Mechanism for Directors and employees to report genuineconcerns has been framed. The policy is revised from time to time to realign it withapplicable regulations or organisations suitability. This policy provides a platform todisclose information confidentially and without fear of reprisal or victimization wherethere is reason to believe that there has been serious malpractice fraud improprietyabuse or wrong doing within the Company. The Company ensures that no personnel have beendenied access to the Audit Committee.

17. RISK MANAGEMENT

The Company is taking necessary steps to identify assess monitor and mitigate variousrisks to key business objectives. Major risks to be identified by the business andfunctions if any would be systematically addressed through mitigating actions on acontinuous basis.

The Directors had laid down internal financial controls procedures to be followed bythe Company which ensure compliance with various policies practices and statutes. TheAudit Committee of the Board from time to time evaluated the internal financial controlof the Company with regard to-

1. Systems have been laid to ensure that all transactions are executed in accordancewith management's general and specific authorization. There are well-laid manuals for suchgeneral or specific authorization.

2. Systems and procedures exist to ensure that all transactions are recorded asnecessary to permit preparation of financial statements in conformity with generallyaccepted accounting principles or any other criteria applicable to such statements and tomaintain accountability for aspects and the timely preparation of reliable financialinformation.

3. Access to assets is permitted only in accordance with management's general andspecific authorization. No assets of the Company are allowed to be used for personalpurposes except in accordance with terms of employment or except as specificallypermitted.

4. The existing assets of the Company are verified/checked at reasonable intervals andappropriate action is taken with respect to any differences if any.

5. Proper systems are in place for prevention and detection of frauds and errors andfor ensuring adherence to the Company's policies.

19. CORPORATE SOCIAL RESPONSIBILITY

During the year under review the compliance under Section 135 of the Companies Act2013 was not applicable to the Company. Further considering the financial and otherfactors your company could not take any initiative in this regard.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Related party transactions that were entered into during the financial year 2016-17were on arm's length basis and were in ordinary course of business. The particulars ofmaterial related party transactions which were entered into on arm's length basis areprovided in Form AOC- 2 as required under section 134(3)(h) of the Companies Act 2013read with Rule 8(2) of the Companies (Accounts) Rules 2014 which is annexed herewith as"Annexure-I". There are no materially significant related party transactionsmade by the Company which may have potential conflict with the interest of the Company.

21. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 134(3)(c) read with 134(5) of the Companies Act2013 the Directors state that:

a) In preparation of the annual accounts for the financial year ended March 31 2017the applicable Accounting Standards have been followed along with proper explanationrelating to material departures;

b) The Directors have selected such Accounting Policies as listed in Note 1 to theFinancial Statements and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give true and fair view of the state of affairs of theCompany at the end of the financial year as on March 31 2017 and of the profit of theCompany for that period;

c) The Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) The Directors have prepared the annual accounts on a going concern basis;

e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;

f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

22. MATERIAL CHANGES

There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. March 31 2017 and upto the date ofthis report. Further it is hereby confirmed that there has been no change in the natureof business of the Company.

23. PUBLIC DEPOSITS

During the period under review the Company did not invite or accept any deposits fromthe public in terms of Chapter V of the Companies Act 2013.

24. LISTING OF SHARES

The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 513723. The Company confirms that the annual listing fees to the stock exchange forthe financial year 2017-18 have been duly paid.

25. LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013

There are no loans granted guarantees given and investments made during the year underreview covered under the provisions of Section 186 of the Companies Act 2013.

26. AUDITORS AND THEIR REPORT

(a) Statutory Auditors:

As per the provisions of Section 139 of the Companies Act 2013 the term of office ofM/s. D. Dhandaria & Company Chartered Accountants [Firm Registration No. 306147E] asStatutory Auditors of the Company will conclude from the close of the forthcoming AnnualGeneral Meeting of the Company. The Board of Directors places on record its appreciationfor the services rendered by M/s. D. Dhandaria & Company as the Statutory Auditors ofthe Company.

Subject to the approval of the Members the Board of Directors of the Company hasrecommended the appointment of M/s. S Mahendra & Co. Chartered Accountants [ICAI FirmRegistration Number: 307131E] as the Statutory Auditors of the Company pursuant to Section139 of the Companies Act2013. Members' attention is drawn to a Resolution proposing theappointment of M/s. S Mahendra & Co. Chartered Accountants [ICAI Firm RegistrationNumber: 307131E] as Statutory Auditors of the Company which is included at Item No.3 ofthe Notice convening the Annual General Meeting.

The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and therefore do not call for further clarification. The Auditor'sReport for the Financial Year ended March 31 2017 does not have any qualifications.

(b) Secretarial Auditors:

The Board of Directors of the Company at their meeting held on November 11 2016appointed Mr. Dilip Kumar Sarawagi Practicing Company Secretary Proprietor of M/s. DKS& Co. having office at 173 M.G. Road 1st Floor Kolkata-700007 toconduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report inForm No.MR-3 for the financial year ended March 31 2017 is annexed herewith as"Annexure-II".

(c) Cost Auditors:

Your Company was not required to appoint Cost Auditor for the financial year endedMarch 31 2017.

(d) Internal Auditors:

The Board of Directors has appointed M/s. AS & Associates Cost Accountants asInternal Auditors of the Company to carry out internal audit of the Company. The AuditCommittee periodically reviews the Internal Audit report.

27. RESPONSE TO AUDITORS' REMARKS

There is no qualification reservation adverse remark or disclaimer by the StatutoryAuditors in their report and hence no explanation or comments of the Board is required inthis matter.

There is no qualification reservation adverse remark or disclaimer by the SecretarialAuditor in their Secretarial Audit Report except that the Secretarial Auditor has reportedregarding non-appointment of Chief Financial Officer by the Company as required underSection 203 of the Companies Act 2013 and the Rules made thereunder.

In respect of the said observation it is stated that though during the year underreview the Company has taken initiative to fill up the said vacancy caused by theresignation of the Chief Financial Officer during the financial year 2010-11 consideringthe gloomy financial positions and business outlook of the Company it was not possible forthe Company to employ suitable candidate for the said vacancy during the year underreview.

28. EXTRACT OF ANNUAL RETURN

The extract of Annual Return as required under Section 134(3)(a) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 isprovided in Form No. MGT- 9 as "Annexure-III" to this report.

Owing to closure of manufacturing facility of the Company no step was taken by theCompany towards Conservation of energy and Technology Absorption during the year underreview. Further there was no foreign Exchange earnings and outgo during the year underreview.

30. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed herewith as "Annexure-IV".

31. FRAUD REPORTING

There was no fraud reported by the Auditors of the Company under Section 143(12) of theCompanies Act 2013 to the Audit Committee or the Board of Directors during the yearunder review.

There is no employee in the Company during the year under review except Directors andKMPs and hence the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 were not applicable to the Company.

33. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS/TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE

During the period under review there were no significant and material orders passed byany regulator /court /tribunal impacting the going concern status and the Company'soperations in future.

34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the financial year 2016-17 pursuantto the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is givenas a separate statement in the Annual Report.

35. NON-APPLICABILITY OF CORPORATE GOVERNANCE REPORT AS PER THE SECURITIES AND EXCHANGEBOARD OF INDIA(LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015

Compliance with the provisions of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 regarding Corporate GovernanceReport is not mandatory to your Company presently. In view of the same the CorporateGovernance Report is not provided in the Annual Report.

Your Directors place on record their sincere thanks and appreciation to financialinstitutions vendors clients investors Central Government State Governments otherregulatory authorities and other stakeholders for their continuing support andCo-operation.

For and on behalf of the Board of Directors

Saurabh Mittal

Place: New Delhi

Non-Executive Chairman

Date: May 30 2017

[DIN: 00273917]

Annexure-I

Form No. AOC-2

[Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act2013 andRule 8(2) of the Companies (Accounts) Rules 2014]

1. Details of contracts or arrangements or transactions not at arm's length basis: Nil

2. Details of material contracts or arrangement or transactions at arm's length basisare given below:

Sl.

No.

Name(s) of the related party and nature of relationship

Nature of contracts/ arrangements/ transaction

Duration of the contracts / arrangements/ transactions

Salient terms of the contracts or arrangements or transactions including the value if any

Date(s) of approval by the Board if any

Amount paid as advances if any

1.

Greenlam Industries Limited (Mr. Saurabh Mittal is Common Director and holding more than 2% of Paid- up share capital in both the Companies)

Agreement in respect of immovable property of the Company

For the period of 11 months w.e.f. August 01 2016

Monthly Rent of ' 420000/-

28th May 2016

Nil

The Company has obtained approval of its shareholders by passing Special Resolution atthe 26th Annual General Meeting of the Company held on September 30 2014 inrespect of the above said transaction for the financial year 2014-15 or thereafter with anincrease in rent by 5% every year.

For and on behalf of the Board of Directors

Saurabh Mittal

Place: New Delhi

Non-Executive Chairman

Date: May 30 2017

[DIN: 00273917]

Annexure-IV

A. Particulars of employees for the year ended March 31 2017 as required under Section197 of the Companies Act2013 read with Rule 5 of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014:

I. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Companyfor the financial year 2016-17 is as under:

Sl. No.

Name of Director

Designation

Ratio of the remuneration of each director to the median remuneration of employees@

1.

Mr. Saurabh Mittal

Non-Executive Chairman

0.0015

2.

Mr. Ramesh Kumar Haritwal

Managing Director & CEO

2.6833

3.

Mr. Beni Gopal Saraf

Independent Director

0.0038

4.

Mr. Mahesh Kumar Malpani

Independent Director

0.0038

5.

Mr. Pradip Manharlal Domadia

Independent Director

0.0038

6.

Ms. Mathangi Ramanujam

Non-Executive Director

0.0030

@There was only one permanent employee in the payroll of the Company namely Mr. HariomPandey who was appointed during the financial year 2016-17. Accordingly remunerationreceived by Mr. Hariom Pandey has been considered for calculating the ratio ofremuneration of each Director to the median remuneration of employee for the aforesaidpurpose.

ii. The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2016-17

Sl. No.

Name of Director/KMP

Designation

% increase in Remuneration in the financial year 2016-17*

1.

Mr. Saurabh Mittal

Non-Executive Chairman

100*

2.

Mr. Ramesh Kumar Haritwal

Managing Director & CEO

3.14

3.

Mr. Beni Gopal Saraf

Independent Director

(16.67)*

4.

Mr. Mahesh Kumar Malpani

Independent Director

(16.67)*

5.

Mr. Pradip Manharlal Domadia

Independent Director

(16.67)*

6.

Ms. Mathangi Ramanujam

Non-Executive Director

(20)*

7.

Mr. Hariom Pandey

Company Secretary

N.A.#

* On entitlement basis.

* The Remuneration of Non- Executive Directors comprises of SiWng fees paid to themduring the year under review. Further there was no increase in per meeting siWng fees ofNon- Executive Directors during the year under review the above increase/decrease inremuneration was due to changes in number of meetings they attended during the financialyear 2016-17.

* Mr. Hariom Pandey was appointed during the financial year 2016-17. Hence comparativefigures are not available.

iii. The percentage increase in the median remuneration of employees of the Company inthe financial year:

There were no permanent employees In the payroll of the Company during the financialyear 2015-16. Hence Increase In the median remuneration of employees is not applicable.

iv. The number of permanent employees on the rolls of Company:

As on March 31 2017 there were 2 permanent employees on the rolls of Company viz. Mr.Ramesh Kumar Haritwal Managing Director & CEO and Mr. Hariom Pandey CompanySecretary of the Company.

v. Average percentile of increase made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: NotApplicable.

vi. Affirmation that the remuneration is as per the Remuneration Policy of the Company:

It is hereby affirmed that the remuneration paid during the year ended March 31 2017is as per the Remuneration Policy of the Company.

B. Particulars of employees for the year ended March 31 2017 as required under Section197 of the Companies Act2013 read with rule 5(2) of Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014:

Sl.

No.

Name of the employee

Age

(years)

Designation

Remuneration

Received

(?)

Qualifica

tion

Experience in years

Date of

commencement of employment

Last employment

1.

Mr. Ramesh

Kumar

Haritwal

53

Managing Director & CEO

1760160.00

B.Com

25

31/05/2007

Greenply Industries Ltd.

2.

Mr. Hariom Pandey

28

Company

Secretary

655977.00

B.Com(H) CS LLB

6

08/06/2016*

A2Z Infrastructure Ltd.

*Mr. Hariom Pandey was designated as Company Secretary with effect from August 112016.

Notes:

1. Remuneration shown above includes salary allowances cost of accommodation medicalreimbursement contribution to provident fund annual commission and other perquisites asper the terms of employment. However the above remuneration does not include provisionfor gratuity and expenses towards club membership fees.

2. All the employees have requisite experience to discharge the responsibility assignedto them.

3. Nature and terms of employment are as per resoluti'on/appointment letter.

4. None of the employees own 2% or more of the equity shares of the Company as on March31 2017